To understand how decisions about military expenditures are made, it is probably most important to understand _____

Suppose the current one-year interest rate is 3%, and financial markets expect the one-year interest rate next year to be 5%. Given this information, the yield to maturity on a two-year bond will be approximately

A) 4%. B) 6%. C) 8%. D) 12%. E) none of the above

Simplicity and fruitfulness are virtues when it comes to judging

a. normative economics b. economic models c. positive economics d. consumer sovereignty e. market performance